Holding on for Tomorrow
The Economist attempts to explain how economic uncertainty dulls investment. It certainly takes a cool head to invest, because a firm’s decision to build up capacity or spend cash on research pays out tomorrow – and must be paid for today. This flow of things makes for uncertain investment returns, influenced by factors—from oil prices to politics—that firms cannot control. As a consequence, many now wonder why big firms are hoarding cash rather than putting the money to work. Common sense suggests this might dull investment…
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